I cover entrepreneurs, people who create value (and make money) out of the ideas in their heads. I spent three years on staff at Forbes before leaving to start Haymaker , a PR firm for startups, in May 2014. (Don't worry, I never write about my clients.) In the age of "The Social Network" myth, I get a kick out of delving into the reality of launching a business. Before joining Forbes I spent a year toiling in startup obscurity at Squidjob.com. Since my bedroom was the office, I never had to sleep under my desk. Comments, tips and forceful criticism are appreciated.

The Future Now: Crowdfunding Won't Wait For The JOBS Act

The JOBS Act will be lost in the purgatory of SEC review for some time now, but increasingly, that seems like a moot point. Crowdfunding for startups is already here.

In some ways this is nothing new. Certainly, working businesses have long been created from funds supporting hardware and creative projects on Kickstarter. Even so, the gatekeeping rules governing the world’s top crowdfunding platform seem to be getting looser, as Penny Arcade raises money to cover a year’s worth of operating costs, Code School gets cash to launch a new course and clothing companies seek funds to capitalize ongoing businesses. It seems like if you can wiggle your company – or even an expansion of an existing venture – into one of the site’s 13 categories, Kickstarter won’t be too strict in enforcing the funding guidelines that discourage businesses from masquerading as projects.

Kickstarter partisans might disagree but, in my view, this is largely a positive development. Such ventures can always go to Indiegogo, which plays faster and looser with projects accepted onto the site, but the visibility and funding available aren’t as valuable.

For startups, aside from an out and out grant, this is the absolute best source of capital around. As Carlos Solorio, a co-founder at Arden Reed said, “Kickstarter campaigns validate your idea, provide early adopters and finance your operations – all in one go.” And without giving up equity! The stodgy, share-hungry crowdfunding platforms legalized by the JOBS Act seem like a mess of regulation and dubious value in comparison. Why would anyone give up equity – and deal with the whims of swarms of amateur investors – when better options are increasingly available?

Perhaps more telling of the shift in startup-financing is the case of Rally, a company that runs a crowdfunding website for donations for social and political causes. As the founder of a crowdfunding site himself, CEO Tom Serres decided to source an entire $7.9 million round of Series A venture financing through AngelList. With the backing of Reid Hoffman and Floodgate Capital’s Mike Maples, most companies would have simply done the rounds on Sand Hill Road, but Serres broadcasted the opportunity out to hundreds of investors over the web. He then culled through 200 emails and spent eight days taking 70 meetings according to PandoDaily. The result: Serres agreed to take money from a mix of venture funds and angel investors, including Greylock Partners, Google Ventures, Tim Ferris and Eric Ries.

What’s so fascinating about the Rally case is that the result isn’t much different from any other round of top-tier fundraising. The quality and mix of the investors is familiar, but the means are entirely different – all done with stunning transparency and frenzied competition. Even companies more classically suited to venture capital now have options. For the blue-chip firms of Silicon Valley and New York, the message is clear: they’re no longer competing against each other for deals but the entire roster of AngelList investors. Gust, a similar company which digitizes and organizes the funding process for angel groups, also promises remake the venture landscape.

In May, I reported on Fred Wilson’s view that the venture capital industry is in for a kick in the ass in coming years, largely due to the rise of angels and the potential tsunami of crowdfunding. It looks like we’re seeing the first stirrings.

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I would have to agree completely 100% w/ JJ. Companies are not waiting around for the jobs act of crowdfunding. The technology is there. The crowd is one component of the capital formation of a much bigger private equity picture.

What an interesting take! With companies raising over $1 million on Kickstarter, you make an excellent point about the ultimate need for equity-crowdfunding sites. I do wonder, though, if those companies raising so much money are the exception to the rule. Your networks have to already be extensive to attract much attention on a platform like Kickstarter, particularly when you’re raising a lot of money. Start-up founders with less access to these kinds of angels or with smaller networks will have a harder time getting noticed. But maybe there will be ways around this as we see more and more successful models.